At its root, a musical performance just exists as a duration of time – one could decide to do something (or nothing) during that period, but either way the performance is over once the duration has passed. I found it fairly useful to perform (both in individual and group contexts) improv sessions with time limitations – say, 1 minute, 3 minutes, 5 minutes, and so on. As with doing any activity, the act of playing music in itself will distort one’s perception of time – I've found it helpful to try to reconcile the differences between my personal interpretation of time passing and the objectified nature of the clock because they can often be two very different things.
As an initial exercise, it may be helpful to use a count-down timer and set explicit limitations. It is fairly difficult to intuitively “feel” the duration of a certain time limit – the timer can serve as a tool to guide the performer, similar to the idea of using a metronome to keep a steady metric beat. Eventually the improviser should gain some familiarity with the feelings of certain duration periods, and should be able to approximate the length of each session through intuition.
This exercise is really no different than how someone might plan for a speech or presentation – the presenter is given a limited amount of time to make certain points and accomplish certain things, and must keep the flow of interest going for their audience at all times despite its largely arbitrary length. Teachers are used to dealing with one hour class periods, workers with 15 minute break times, TV-producers with half-hour slots, and so on. Dealing with durational values is very much a part of life -- especially modern life -- where people are expected to adhere to certain time values – these exercises can help the improviser to come to an understanding of how to manage themselves within these structures.
These exercises have practical applications as well, especially when working with multimedia or multidisciplinary projects. Often the director or producer will require the musician to create something of specific length, and this is tends to be non-negotiable in most contexts. Being able to improvise music of an approximate length very quickly greatly reduces the time involved in the editing process – if 5 minutes of music of a certain mood is required, then an improviser might perform something that roughly matches that length. The clip then can be put to use with relatively minor editing processes, saving a great deal of time for both the musician and the producers involved.